Technical outlook:
USDJPY has carved a meaningful bottom at 102.59 on January 06, 2021. Further, bulls have managed to rally through 104.40 levels, taking out immediate resistance at 103.80/90 as well. The USD/JPY pair is seen to be trading around 103.67 at this point in writing and is expected to form a higher low around 103.30/35 levels in the next 1-2 trading sessions.
Immediate resistance is seen through the 104.40/50 zone, while support should be strong near 102.60 levels respectively. The larger wave structure remains constructive for bulls after prices rebound from 102.59, which is the Fibonacci 0.786 retracement of the earlier rally between 101.18 and 111.75 respectively.
Also note the bulls had managed to produce an engulfing bullish candlestick pattern, indicating a potential trend reversal. The recent boundary which is being worked upon is between 102.59 and 104.40 levels respectively. A corrective drop towards 103.30 levels would be considered as constructive for the next bull run to resume.
Trading plan:
Remain long, stop below 101.18, target 107.00 and higher.
Good luck!
